The current crisis in South East London’s NHS was caused almost entirely by unsustainable Private Finance Initiative debt held by South London Healthcare Trust.
Last summer the government placed SLHT in “Unsustainable Provider Status” (a category invented by Andy Burnham). That allowed axe-wielding bureaucrat Matthew Kershaw to get to work dismantling the whole health economy of South London. Writing the report alone has so far cost the taxpayer £2 million and he has massively extended his remit, using the funding crisis in SLHT to recommend cuts across South London.
Whatever happens in South London will be a test case for elsewhere in the country. The government has already signalled that other Trusts will be placed in the failure regime before the end of the financial year. Seven Trusts have already approached the Department of Health for help with PFI debt.
NHS managers are coming under huge pressure to get their organisations fit for Foundation Trust status. The government wants all Trusts to become Foundation Trusts by April 2014. Achieving Foundation Trust status involves fulfilling a range of quality criteria whilst also balancing the books. As the NHS is facing a £20 billion funding gap, many Trusts are struggling with their FT applications. Added to this problem is the much delayed report on the failures at Mid-Staffordshire Foundation Trust, which will almost certainly impose even tougher criteria for getting FT status.
It is against this backdrop that we are seeing a wave of mergers as NHS bosses seek to find ways of cutting costs through economies of scale.
This has led to giants like the £1 billion Barts Health Foundation Trust, which covers acute care in East London, and the proposed £2.1 billion giant covering Guy’s and St Thomas, King’s and South London and Maudsley. There are also smaller mergers, and the giants are swallowing up the smaller Trusts.
In general the mergers will allow for more planning and cooperation within an NHS which has been deliberately fragmented and set up to compete against itself. However, many of these mergers need to be resisted because they cannot be disentangled from the huge cuts packages. The mergers proposed in SLHT illustrate this problem.
SLHT was established in 2009 through a merger of three hospitals, the Queen Elizabeth in Woolwich, the Princess Royal in Bromley and Queen Mary in Bexley. Last year it was £65 million in deficit on a £459 million turnover. The entirety of this deficit was made up of PFI payouts amounting to £69 million.
The PFI debt is unsustainable because it was the government equivalent of taking out a wonga loan. Princess Royal Hospital cost just £118 million to build but is estimated that the PFI repayments will cost £1.2 billion.
If the NHS bosses had just gone down to their local bank and taken out a mortgage then the hospital would have been paid for years ago. If government had done what it usually does and paid for the hospital directly out of the public purse then we could have built three or four more hospitals in South London alone with the money that has already been spent. The decision by the Tories and New Labour to set up PFI was nothing but a gift of taxpayers’ money to the super-rich.
Because of this debt Kershaw decided that the best medicine was to smash up SLHT and offer up services any willing provider. Most of the NHS Trusts in and around London have expressed an interest in taking over parts of the Trust, and private sector firms like Virgin Care and Serco also looking to hive off a “profitable” section of the organisation. According to Health Service Journal none of the expressions of interest include proposals for taking over the entire Trust.
From the interim report it looks likely that the Princess Royal will have some of its PFI debt taken off its hands by the government and will then be taken over by King’s Hospital. The Queen Elizabeth in contrast will merge with £222 million a year Lewsham Hospital Trust with all its PFI debt intact.
Lewisham will then pay off this debt by sacrificing its A&E department, closing wards and downgrading its maternity service.
The A&E department is the pumping heart of any district general hospital. Closing it leads eventually towards closing the whole site.
The NHS is experiencing a perfect storm of funding cuts, mounting PFI debt and a legislative framework that allows for rapid privatisation. This is an entirely manufactured crisis created by politicians who turned the NHS into a cash cow for the capitalist class. If they are successful then the result will be that working-class people will die of curable diseases and live in fear of illness and pain.
The frontline to save the NHS is now in Lewisham, where a mass community mobilisation is ensuring that the first hospital in the failure regime will not go down without a fight.
West London cuts threat
“Shaping a healthier future”, a consultation carried out by NHS North West London, concluded on 8 October.
The consultation, ostensibly about changing services to improve patient care, was actually about implementing massive cuts to NW London hospitals.
All the options proposed involve the downgrading of at least four hospitals, with closure of A&Es and removal of specialist services. The architects of the plans are supporters of the government’s “any qualified provider” programme for the NHS; their plans to hive off services around NW London will be helped if existing services can be undermined with reduction in capacity making parts of the NHS increasingly financially unviable.
It comes as no surprise that following the consultation NW London NHS are proposing their preferred option; closure of accident and emergency units at Hammersmith, Charing Cross, Ealing and Central Middlesex. That is four out of the nine A&E units across NW London. Alongside these closures some specialist services will also be moved. A&E closures mean that requirements for hospitals to have certain facilities available and to have a certain number of senior clinicians are reduced. This is often the first step in running down hospital services, with eventual closure of the hospital a real possibility.
As well as the reduction of services, these changes will put unprecedented pressure on the five hospitals identified as major hospitals when all A&E traffic comes their way.
As well local demonstrations, we need to start organising for bolder actions such as work-ins to keep services open.
• Saturday 8 December — “Casualty Convoy” through West London. Email olivernew@btopenworld.com.
